Hosting software provider SWsoft began its Global Hosting Partner Summit today, May 8, kicking things off with an introductory keynote presentation by CEO Serguei Beloussov.

In a continuation, and reiteration, of a message I've seen delivered at recent industry events, Beloussov expressed his feeling that the immediate future of the hosting market is tied to the software as a service delivery model.

In fact, he said, SWsoft is so committed to the SaaS model that the subject will dominate the content of the event of which we are currently in attendance.

Rather than repeat a point I've communicated here, and elsewhere, I'll boil the SWsoft SaaS message down to a few sentences:

The company believes it is the main opportunity for hosting providers to grow their revenue. By 2011 (according to a familiar looking PowerPoint slide), SWsoft believes that Web hosting providers will have to have built in support for SaaS.

SWsoft is developing for SaaS. And the model is relevant to almost every aspect of the company's platform. Automation and virtualization, in particular, have specific relevance to the model.

Web hosts, says Beloussov, are "the ideal channel" for SaaS.

He made a very interesting point while discussing the big players - Google and Microsoft - inescapable when discussing the hosted application market:

As far as the popular media is concerned, he says, Microsoft is regularly portrayed as an "evil" company (a notion that may have mostly to do with the years-old open source debate and operating system monopoly/fair-play concerns), while Google is regularly portrayed as a "good" company (probably the result of some good decisions and a genuinely conscientious corporate culture).

But with regard to the service provider market in general, and the SaaS market in particular, the reality is actually the opposite of this popularly held perception. Google, he says, is jealous about its businesses. It doesn't want anybody else making money in the markets it chooses to pursue. Microsoft's business is built around partners - when Microsoft's partners (hosting providers) make money, Microsoft makes money.

MORE: Keep checking back for more presentations by SWsoft, as well as notes from Microsoft, IDC and others. And there may be something worth reporting from tonight's event at the "ESPN Zone"

ALSO: Check back shortly for a fabulous photographic update to this post (UPDATE - PICTURES ADDED).

We just sent the May 2007 issue of WHIR magazine off to the printer, which is good news, because we're just about out of midnight oil around here (it having been all burned up, you see).

It should be arriving in mailboxes starting the week of May 21, but I thought I'd offer a little advanced notice on what to expect from what I happen to think is a very timely issue.

If you're not a subscriber, incidentally, you could become one via a fairly simple and free-of-charge process here.

For about a year now, we in the Web hosting business have been experiencing the impassioned discussion surrounding the subjects of Web 2.0 and software as a service. These terms, we are told, describe the future of the business - a world in which applications have moved from the desktop to the Internet, and information is passed seamlessly between them.

You have every reason to believe this is true. Whether the "future" is two years away, or five, the companies designing the platform for hosting are determined that the term "hosting" will come to describe application hosting.

Now is the time for you to figure out how your business fits into that environment. And it's appropriate that I feel that way, because it's exactly the subject we cover in our "Building Blocks" issue.

The term Web 2.0 is used to describe the user's experience relative to the new system of applications available via the Web, which can be pulled together to create an Internet experience, and a presence on the Internet. This has, to an extent, reduced the appetite for Web hosting as it was once understood. In a feature on the new Web 2.0 ecosystem, Wayne Epperson helps to define the hosting company's role in this new environment.

SaaS, on the other hand, describes the service delivery side. The term is associated with hosted applications for business - the market where analysts see the real revenue potential for service providers. Dennis McCafferty contributes a feature on how hosts can best go about building the platform for delivering those hosted applications.

For hosts looking to make that first step into the hosted application market, Esther M Bauer describes the potential of hosted Microsoft Exchange, an easily understood, and universally needed business tool with a built-in audience and a vast support network. It's sort of the closest thing to a no-brainer in the hosted application business.

Keep an eye on the mailbox for the latest issue of WHIR magazine. My hope is that, after reading through it, you'll have a better sense of where your business stands with regard to the Web's emerging ecosystem.

ALSO: I understand I've already occupied one of your eyes with the previous paragraph, but if I might humbly recommend a target for the other one, I'd suggest you keep it on this blog for updates from the SWsoft Global Hosting Partner Summit, which begins today in Washington.

We posted a feature today discussing the launch of Concentric Hosting's new Perimeter Email Protection service, for which I had the opportunity to speak with Nate Gilmore, the company's director of marketing.

The interview, as is sometimes the case, included some interesting material for which there was unfortunately not room in the feature. And as is also sometimes the case, the blog seems like the perfect place to give the discussion a little extra breathing room.

Outside of the here's-a-new-product angle, PEP's launch was notable for a sort of philosophical departure from a lot of the material with which we tend to be presented.

The hosting industry in general is right now very consistent in extolling the virtues of the software as a service model, particularly in the case of hosted email. And rightly so, I think, though possibly to the exclusion of much in-depth discussion of the interests of those many, many businesses that would like to get a few more miles out of their on-premise messaging solutions.

Concentric, like any good service provider with a vested interest in the future of email, agrees that the long-term destiny of messaging is SaaS. But Gilmore points out that the revolution may not be complete just yet:

"Long term, you're going to see more and more businesses move to hosted messaging solutions. Especially newer businesses that don't already have an existing investment. But there are a lot of older businesses out there, and mail servers are selling pretty quickly. There are a lot of mail server software companies out there that are still experiencing good growth. There is still a section of customers that will always want to hug that mail server on-premise, and will want to continue to have their workflow and mail server flow handled on premise. And there is a whole industry if ISVs and CSVs and IT professionals that service that industry."

The point, perhaps, is that in the industry's efforts to appear forward-thinking, we may be overlooking opportunities to bring new technology to old-fashioned arrangements of services.

What's more, you may be passing on opportunities to establish relationships with those for-now holdouts who might eventually become valuable customers of SaaS-model services.

Gilmore says Concentric's road map certainly leads from the PEP solution to the hosted Groupware product the company currently has in beta.

"We also have a product that we're not including with this release because it's still in beta and it only has a small number of customers. It's not ready for primetime like PEP. And that's our Groupware product. So when they're ready to completely offload their email solution, we're hoping they'll still trust us because we did well with their perimeter email protection."

We have mentioned, here and there, that the mass market for Web hosting customers could be out of your grasp at this point. As we have also described at length, that market is now the almost-exclusive province of the very biggest Internet brands - Google, Microsoft, Yahoo! and if there's another, it's really not leaping to mind at the moment.

To a certain extent, mass-market hosting has always been a competition of price. But that price competition has reached its long-term end. Each of those three companies offers a basic sort of Web hosting package for free (Yahoo! through GeoCities - the other two more directly).

The pricing competition was, once upon a time, a competition of scale. But not these days. One of the realities of the (somewhat) new Internet advertising ecosystem is that a Web site - and by extension a Web hosting customer - has an inherent valuable independent of any monthly fees.

It's no coincidence that the three biggest challengers for the mass Web hosting market are also the operators of the three most significant pay-per-click advertising networks. Give away a bit of hosting through Blogger, or Google Pages or Live Spaces, and if that site produces one fifty-cent click a day (neither a particularly good nor a particularly bad performance), that's $15 per month in PPC traffic.

Since price and scale are no longer determining factors in the mass market, that leaves branding as the determining factor in this particular race.

For all these reasons, and doubtless many others, it's interesting to note that Google ranked first in Millward Brown Optimor's annual rating of global brand value (reported here by silicon.com). Google leapfrogged last year's leader, Microsoft, which settled into third place behind General Electric this year.

What does that mean for your business? Most probably nothing. What does it mean for the Web hosting business? Well, Google has a leg-up in the brand-based battle for the mass market. No real surprise there.

Given the odds (zero) that your company (unless it's Microsoft or Yahoo!) can make a legitimate play for the mass market, perhaps the title of this post is more provocative than explicitly true.

And with last week's acquisition of DoubleClick, Google also has a firm hold on the Internet's advertising business. Another interesting product of this advertising ecosystem is the many-tiered, and contradictory relationships in the Web hosting business.

Your biggest competition for the mass hosting market, in each of these cases, is also probably a supplier of some kind. And more than likely, a partner.

It's been a few years, now, that AIT has been a Web hosting provider crusading against click fraud. The matter has been a bit of a personal quest for CEO Clarence Briggs, who in 2005 led a class action lawsuit against Google itself, attempting to lay responsibility for fraud in Internet advertising at the search giant's doorstep.

At the time, we ran an interview with Briggs. And, while the lawsuit, the accusations and their target all at least hint at the possibility of some kind of publicity stunt, there's really no mistaking his sincerity.

More importantly, his point is valid. In 2005, he didn't want Google's money. He wanted his money back. And he wanted to know that pay-per-click advertising was a viable vehicle for online marketing.

Without a strict, and transparent, method for vetting clicks, how could advertisers know they were getting what they paid for?

The Google suit was settled almost a year ago, a deal that required Google to refund a part of the money spent by advertisers during the previous four years. However, a CNN article excerpted on AIT's anti click fraud site IGeryon.com (though no longer available on CNN's site), says "independent studies assert that anywhere from $100 to $400 of every $1,000 stems from click fraud." IGeryon is encouraging readers to opt out of the settlement.

This week AIT accused a customer, the Fayetteville Publishing Company, of click fraud. At the same time, the company announced that it had uncovered a new form of click fraud it calls "bang box." AIT described the tactic in a press release:

"A search engine affiliate hosts it web servers in a data center with an ISP. The affiliate then gets fed advertiser ads from the search engines, syndicates and other IAB members to its web site. Then the affiliates hire a third party to rent a web server inside the ISP's data center in order to "Bang" or click on their affiliate site driving impressions or clicking on the ads themselves using an internal IP address without generating suspicious external traffic. They are paid for the clicks by the search engines who in this case, probably don't know what is happening."

In addition to raising concerns about the legitimacy, in general, of some advertising practices, AIT's ongoing interest in click fraud raises some questions, specifically, about the pay-per-click advertising you may be doing, and just what you're actually paying for the legitimate clicks you receive.

If you aren't already, there are apparently quite a few tools designed to defend your advertising dollars against click fraud. There are a few listed here.